Analysts' forecasts as proxies for investor beliefs in empirical research

Article Abstract:

A model of rational trade which incorporates earnings forecasts has been developed. The model, combined with analysis, showed that relations among forecast properties, theoretical constructs of investor attitudes and price and volume response to earnings announcements are complex and sometimes counter-intuitive. Results indicate that the model can aid in the understanding and interpretation of empirical investigations and developing empirical tests of market reactions to announcements.

Beliefs, opinions and attitudes, Economic forecasting, Investors, Rational expectations (Economics)

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Public information and heuristic trade

Article Abstract:

Heuristic traders who are informed about market prices and efficiency are more advantaged than informed Bayesian traders, according to a study. The overreaction of heuristic traders to new information is likely more beneficial in an evolutionary scenario. This reaction is used to analyze the connection between market liquidity and public disclosure, to determine the variance of price changes that usually occurs after a public announcement and the efficiencies of market prices.

Securities Dealers, Investment Banking and Securities Dealing, Security brokers and dealers, Analysis, Stocks, Capital market, Capital markets, Heuristic, Heuristics (Psychology)

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Pre-announcement and event-period private information

Article Abstract:

A rational trade model incorporating pre-announcement and event-period private information is presented and evaluated. The key implication in the pre-announcement information is that trading volume is related to price change at the time of an earnings announcement while the key implication in the event-period information is that trading volume occurs even in the absence of a price change.

Econometrics & Model Building, Economics, Econometrics, Business models, Commerce

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